London — The European T2 ethanol price reached a one-month high Friday at Eur542/cu m as seasonal maintenance has created some shorts in the market, pushing physical bid levels up.
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This is despite the expectation of increased product availability in October, mainly from beet-based ethanol producers.
The European ethanol market has largely been on a downward trend over the last couple of months, with bearish sentiment putting pressure on values and with sources reporting an easing of the supply situation in ARA, partly due to additional product coming out of Spain.
Plant maintenance was not expected to have a significant impact on the market as it was mostly planned, so producers were expected to have allowed sufficient stocks to see them through any turnarounds.
However, the persistently backwardated structure of the market and falling prices have provided an incentive to sell sooner rather than later and limit stock levels.
"If I was a producer I wouldn't keep stock, just buy it back if I need it later," a source said.
As a result, although sources do not see the market as tight, there are places where the market needs some product, with sources reporting some train-barge logistical swaps which have put pressure on the ARA barge market.
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